Hot ground originates from the psychology of Vietnamese people

In the past time, in the market, there have been hot land in some localities, but the subjective cause comes from the psychological preference of the majority of Vietnamese people.


At the seminar "Professional real estate brokerage and international integration" took place in the morning of June 29, Prof. Dang Hung Vo said that such a hot situation occurred in three planned locations into three special administrative-economic zones including Van Don, Northern Van Phong and Phu Quoc. In order to cut down the hot status, localities had to use administrative orders to prohibit transactions, ban the conversion of use purposes while adjusting the planning. So far, these statuses have subsided and localities have stopped applying the above administrative measures.


In addition, in some districts at the district level in Hanoi and Da Nang, there is also a situation of hot land with rumors that it will be planned for the district next year. Media reports, these rumors were launched by speculators to create fake hot land, through high-priced fake deals. Meanwhile, brokerage agencies have demonstrated by data that the number of real estate transactions is almost unchanged, high land prices are just rumors. 


A recent trend of hot real estate in the land area related to the mechanism of "subdividing plots" has been adjusted many times by the State. Mr. Vo said, in the period 2004 - 2007, the State completely banned the sale of plots in urban areas. After that, the ban only applies to cities of grade 3 and above and now allows to extend this mechanism according to the decision of the provincial People's Committee. 
Besides, the land plot segment has been hot in some urban areas and rural areas adjacent to urban areas.


According to Prof. Dang Hung Vo, the foundation land is in line with the preferences of Vietnamese people, including investors and consumers.


Explaining this situation, Mr. Vo said that because the land was in line with the preferences of Vietnamese people, including investors and consumers. According to this trend, many "unreal" projects on ground subdivision were formed, including the participation of a number of real estate brokerage agencies in land brokers. General assessment of the real estate market in the early period of 2019, Mr. Vo said, the market was tending to fall into stagnation. In some localities, some time, the ground fell into a real or fake hot status, associated with negative tactics. "The general stagnation of the whole market was caused by legal conflicts between laws related to real estate and inconsistent law enforcement in localities" Mr. Vo said.


On the other hand, the State Bank's policy on tightening real estate credit is also a cause for the real estate market to lack capital for development. This situation reduces demand from secondary (individual) investors, ie reduces future real estate transactions. For the situation of hot local real estate and time, according to Mr. Vo, there is a completely natural cause from the development plan associated with the ability to increase real estate prices. The only thing is that the legal framework does not have a reasonable solution to "cut the hot status" but must rely on administrative solutions without a legal basis decided by the local authorities.


In some localities there is a situation of creating fake hot stauts based on tactics of spreading false information about development planning. “These fake news are launched by speculators to gain profits, in which the brokerage sector has done a good job of reducing the fever by providing real-estate statistics there on mass media" said Vo.


According to Mr. Vo, for the situation of hot land plot in projects that need to be reconsidered, it is allowed to implement the mechanism of "selling the sub-plot". In many developed countries, this mechanism is only applied to address housing for low-income people and is very well managed. Vietnam also needs to review the legal framework on division of subdivided plots so as not to create hot ground like the recent time. "Thus, the causes and solutions are in the state management area" Prof. Vo emphasized.


For the hot land plots in "unreal" projects this activity was taken by a number of real estate businesses, including some brokerage firms. Certainly, this negative cause from real estate businesses, need to be handled thoroughly.


According to Tam An